To pay a contractor from a rental property bank account, get a written invoice and a signed W-9 before the work is paid, write the check from the account that owns that property's income and expenses, and put the property address and invoice number on the check or stub. Then keep a copy of the invoice and a record of the check. That one habit keeps your rental books clean at tax time.
Why pay contractors from the rental property account?
When rent comes into one account and repair bills go out of the same account, every dollar has a paper trail that belongs to that property. Your bank statement becomes a first draft of your rental income and expense report, and you are not digging through personal spending to figure out which plumber bill was for the duplex.
Many landlords go one step further and give each property, or each LLC, its own account. Whether you must do that depends on your state, your lender and how your properties are owned, so ask your accountant or attorney. This guide works either way, and the multiple rental properties guide covers how to organize several accounts.
If you hold tenant security deposits, some states also have rules about where that money sits and whether it can be mixed with operating funds. Do not pay repair bills from a deposit account unless your attorney says you may. Repair money should come from the operating account.
What to collect before you cut the check
Contractors expect to be paid quickly, but ten minutes of paperwork up front saves hours later. Before you print a check for a new vendor, collect these items:
- A written invoice with the vendor's legal name, the date, a short description of the work, the property address and the amount due. A text message saying 'it was $385' is not an invoice.
- A completed Form W-9 from any individual or unincorporated business you may pay enough to need a Form 1099-NEC. The IRS reporting threshold changes, so check the current amount or ask your accountant.
- The exact payee name as it should appear on the check. A handyman may operate as 'Mike's Home Repair LLC' but give his own name verbally. The W-9 settles it.
- Proof the job is done, if you want it: a photo, a message from the tenant, or your own walk-through note.
- License and insurance details, where your local rules or your insurer expect them for the kind of work being done.
Keep the W-9 with the vendor's file, not in a pile on your desk. You will want it in January, when you total up what each vendor was paid. The contractor checks guide goes deeper on that side of the process.
Step by step: paying a contractor by check
- Match the invoice to the work. Confirm the address, the scope and the amount. If the job changed, get a corrected invoice rather than writing a different amount on the old one.
- Choose the right bank account. If you keep one account per property, pick the one for the property that was repaired. If one account covers everything, plan to tag the property in the memo.
- Enter the payee. Use the exact name from the W-9 or invoice. If you pay this vendor often, save them once so the name is identical every time.
- Enter the amount. Check that the figure in numbers and the amount in words agree. A $385.00 check should read Three hundred eighty-five and 00/100.
- Fill in the memo with the property and the invoice number, for example '14 Maple St - Inv 2207 - water heater'. Keep it short enough to fit on one line.
- Add invoice lines to the stub if the bill has several parts, such as parts, labor and a trip charge, so the contractor sees what you are paying.
- Run a test print on plain paper and hold it against a real check before you load blank stock.
- Print the check, sign it, and write the check number on the invoice. File the invoice in the property's folder, paper or digital.
What to put on the check and stub
The check itself has little room, so use the memo for identification and the stub for detail. The table shows a practical split that works for most small landlords.
| Field | What to enter | Example |
|---|---|---|
| Payee | Legal name from the W-9 | Blue Line Plumbing LLC |
| Amount | Exactly what the invoice says, less any agreed deposit already paid | $385.00 |
| Memo | Property address or code plus invoice number | 14 Maple St Inv 2207 |
| Stub lines | Each line item from the invoice | Water heater valve 140.00; Labor 245.00 |
| Date | The day you sign it, not a vague future date | Today's date |
The memo line is for you and the vendor, not for the bank. Never put anything on it you would not want a tenant or a neighbor to read if the check were lost.
How do you handle deposits, partial payments and multi-property jobs?
Roofers, painters and flooring crews often want money up front. Write the deposit check against the quote, note 'deposit' in the memo, and record it. When the final invoice arrives, pay the balance and show the deposit as a stub line so both of you can see the math. Pay the amount owed, not the full invoice again.
If one contractor worked on two of your buildings, ask for two invoices. Writing one check for both makes your records messy, and it forces you to split a cost between properties after the fact. Two invoices usually means two checks, each from the right account and each tagged with its property.
For a large job with progress payments, make a one-line note in a spreadsheet: quote, deposits paid, balance remaining. That sheet, plus the check numbers, is all you need to settle a disagreement later.
Keeping contractor records for tax time
Rental repairs generally go on your rental income and expense reporting, and what counts as a repair versus an improvement is a tax question. Do not guess. Give your accountant clean data: payee, date, amount, property and invoice number for every check.
A check register that you can export to a spreadsheet makes this simple. Once a quarter, download it, sort by payee, and see who is heading toward the 1099 threshold. The digital record guide shows what to capture, and the subcontractor tracking guide walks through the totals.
Keep invoices and W-9s for as long as your accountant recommends. Retention periods vary, and nothing here is tax advice.
Common mistakes when paying contractors
- Paying from a personal account and forgetting to log it. The expense is real, but the record is now somewhere else.
- Writing the check to 'cash' or to a first name. If the check is lost, anyone can take it, and you cannot prove who got paid.
- Skipping the W-9 until the vendor is hard to reach. Ask before the first payment.
- Overwriting a mistake. If a payee or amount is wrong, void the check and print a new one with a new number.
- Leaving blank check stock in an unlocked drawer. Blank stock is a fraud risk, so keep it locked up and shred spoiled checks.
- Paying in full before the work passes inspection. For bigger jobs, agree on a holdback in writing.
Putting it together
The routine is short: invoice and W-9 in, check out of the right account, property and invoice number on the memo, record saved. If you manage several buildings, the check printing for landlords page shows how those steps fit a landlord's month.
Check Writer 123 keeps a saved vendor list, supports several bank accounts on one login, prints invoice lines on the check stub and exports a check register to CSV. You enter each check once, file the invoice with the property's records, and use the CSV for your books.